I have, through research, learned the following to be true and most likely applies
to me, which is the reason I have requested and demanded “the bank” to validate their
claims and produce pursuant to applicable law. This MEMORANDUM serves to support
my suspicions and identify criminal facts. The “bank” allegedly “loaned me their money”
when in reality they deposited (credited) my promissory note and used that deposit to
“pay my seller”. Source and reasoning after reviewing the original file clearly shows this
fact, which is the reason for the “bank” refusing and failing to validate and to produce as
stipulated by law. However, the truth is out and there is plenty of law backing up the fact
that the bank is criminal.

FORECLOSURE ACTIONS AND CASES LAWFULLY DISMISSED (NOT
LETTING BANK FORECLOSE WITHOUT LAWFUL VALIDATION AND
PRODUCTION) BY THE COURTS DUE TO BANK’S FAILURE TO VALIDATE
& PRODUCE AS STIPULATED BY LAW AND COMMITTED “BANK FRAUD”
AGAINST THE BORROWER

FROM THE BAR ASSOCIATION’S OFFICIAL WEB SITE :… ”this Court has the
responsibility to assure itself that the foreclosure plaintiffs have standing and that subject
matter jurisdiction requirements are met at the time the complaint is filed. Even without
the concerns raised by the documents the plaintiffs have filed, there is reason to question
the existence of standing and the jurisdictional amount”. Over 30 cases are covered by
the BAR at: http://www.abanet.org/rpte/publications/ereport/2008/3/Ohioforeclosures.pdf

4. “A bank may not lend its credit to another even though such a transaction turns out
to have been of benefit to the bank, and in support of this a list of cases might be
cited, which-would look like a catalog of ships.” [Emphasis added] Norton Grocery
Co. v. Peoples Nat. Bank, 144 SE 505. 151 Va 195.

5. “In the federal courts, it is well established that a national bank has not power to lend
its credit to another by becoming surety, indorser, or guarantor for him.”’ Farmers
and Miners Bank v. Bluefield Nat ‘l Bank, 11 F 2d 83, 271 U.S. 669.

6. Bank of New York v. SINGH – Judge KURTZ 14Dec2007

7. Bank of New York v. TORRES – Judge COSTELLO 11Mar2008

8. Bank of New York v. OROSCO – Judge SCHACK 19Nov2007

Citi Mortgage Inc. v. BROWN – Judge FARNETI 13Mar2008

9. “The doctrine of ultra vires is a most powerful weapon to keep private corporations
within their legitimate spheres and to punish them for violations of their corporate
charters, and it probably is not invoked too often…. Zinc Carbonate Co. v. First
National Bank, 103 Wis 125, 79 NW 229. American Express Co. v. Citizens State
Bank, 194 NW 430.

“It has been settled beyond controversy that a national bank, under federal Law being
limited in its powers and capacity, cannot lend its credit by guaranteeing the debts of
another. All such contracts entered into by its officers are ultra vires . . .” Howard &
Foster Co. v. Citizens Nat’l Bank of Union, 133 SC 202, 130 SE 759(1926).

59. “Neither, as included in its powers not incidental to them, is it a part of a bank’s
business to lend its credit. If a bank could lend its credit as well as its money, it
might, if it received compensation and was careful to put its name only to solid
paper, make a great deal more than any lawful interest on its money would amount
to. If not careful, the power would be the mother of panics, . . . Indeed, lending credit
is the exact opposite of lending money, which is the real business of a bank, for
while the latter creates a liability in favor of the bank, the former gives rise to a
liability of the bank to another. I Morse. Banks and Banking 5th Ed. Sec 65; Magee,
Banks and Banking, 3rd Ed. Sec 248.” American Express Co. v. Citizens State Bank,
194 NW 429.

60. “It is not within those statutory powers for a national bank, even though solvent, to
lend its credit to another in any of the various ways in which that might be done.”
Federal Intermediate Credit Bank v. L ‘Herrison, 33 F 2d 841, 842 (1929).

61. “There is no doubt but what the law is that a national bank cannot lend its credit or
become an accommodation endorser.” National Bank of Commerce v. Atkinson, 55
E 471.

63. “.. . the bank is allowed to hold money upon personal security; but it must be money
that it loans, not its credit.” Seligman v. Charlottesville Nat. Bank, 3 Hughes 647,
Fed Case No.12, 642, 1039.

64. “A loan may be defined as the delivery by one party to, and the receipt by another
party of, a sum of money upon an agreement, express or implied, to repay the sum
with or without interest.” Parsons v. Fox 179 Ga 605, 176 SE 644. Also see Kirkland
v. Bailey, 155 SE 2d 701 and United States v. Neifert White Co., 247 Fed Supp 878,
879.

68. “A check is merely an order on a bank to pay money.” Young v. Hembree, 73 P2d
393

69. “Any false representation of material facts made with knowledge of falsity and with
intent that it shall be acted on by another in entering into contract, and which is so
acted upon, constitutes ‘fraud,’ and entitles party deceived to avoid contract or
recover damages.” Barnsdall Refining Corn. v. Birnam Wood Oil Co. 92 F 26 817.

70. “Any conduct capable of being turned into a statement of fact is representation.
There is no distinction between misrepresentations effected by words and
misrepresentations effected by other acts.” Leonard v. Springer 197 Ill 532. 64 NE
301.

71. “If any part of the consideration for a promise be illegal, or if there are several
considerations for an unseverable promise one of which is illegal, the promise,
whether written or oral, is wholly void, as it is impossible to say what part or which
one of the considerations induced the promise.” Menominee River Co. v. Augustus
Spies L & C Co.,147 Wis 559-572; 132 NW 1122.

72. “The contract is void if it is only in part connected with the illegal transaction and
the promise single or entire.” Guardian Agency v. Guardian Mut. Savings Bank, 227
Wis 550, 279 NW 83.

73. “It is not necessary for recision of a contract that the party making the
misrepresentation should have known that it was false, but recovery is allowed even
though misrepresentation is innocently made, because it would be unjust to allow
one who made false representations, even innocently, to retain the fruits of a bargain
induced by such representations.” Whipp v. Iverson, 43 Wis 2d 166.

The oldest scheme throughout History is the changing of currency. Remember the
moneychangers in the temple (BIBLE)? “If you lend money to My people, to the poor
among you, you are not to act as a creditor to him; you shall not charge him interest”
Exodus 22:25. They changed currency as a business. You would have to convert to
Temple currency in order to buy an animal for sacrifice. The Temple Merchants made
money by the exchange. The Bible calls it unjust weights and measures, and judges it to
be an abomination. Jesus cleared the Temple of these abominations. Our Christian
Founding Fathers did the same. Ben Franklin said in his autobiography, “… the inability
of the colonists to get the power to issue their own money permanently out of the hands
of King George III and the international bankers was the prime reason for the
revolutionary war.” The year 1913 was the third attempt by the European bankers to get
their system back in place within the United States of America. President Andrew
Jackson ended the second attempt in 1836. What they could not win militarily in the
Revolutionary War they attempted to accomplish by a banking money scheme which
allowed the European Banks to own the mortgages on nearly every home, car, farm,
ranch, and business at no cost to the bank. Requiring “We the People” to pay interest on
the equity we lost and the bank got free.

Today people believe that cash and coins back up the all checks. If you deposit $100 of
cash, the bank records the cash as a bank asset (debit) and credits a Demand Deposit

Account (DDA), saying that the bank owes you $100. For the $100 liability the bank
owes you, you may receive cash or write a check. If you write a $100 check, the $100
liability your bank owes you is transferred to another bank and that bank owes $100 to
the person you wrote the check to. That person can write a $100 check or receive cash.
So far there is no problem.

Remember one thing however, for the check to be valid there must first be a deposit of
money to the banks ASSETS, to make the check (liability) good. The liability is like a
HOLDING ACCOUNT claiming that money was deposited to make the check good.

Here then, is how the switch in currency takes place

The bank advertises it loans’ money. The bank says, “sign here”. However the bank never
signs because they know they are not going to lend you theirs, or other depositor’s
money. Under the law of bankruptcy of a nation, the mortgage note acts like money. The
bank makes it look like a loan but it is not. It is an exchange.

The bank receives the equity in the home you are buying, for free, in exchange for
an unpaid bank liability that the bank cannot pay, without returning the mortgage
note. If the bank had fulfilled its end of the contract, the bank could not have
received the equity in your home for free.

The bank sells the mortgage note, receives cash or an asset that can then be
converted to cash and still refuses to loan you their or other depositors’ money or
pay the liability it owes you. On a $100,000 loan the bank does not give up $100,000.
The bank receives $100,000 in cash or an asset and issues a $100,000 liability (check) the
bank has no intention of paying. The $100,000 the bank received in the alleged loan is the
equity (lien on property) the bank received without investment, and it is the $100,000 the
individual lost in equity to the bank. The $100,000 equity the individual lost to the bank,
which demands he/she repay plus interest.

The loan agreement the bank told you to sign said LOAN. The bank broke that
agreement. The bank now owns the mortgage note without loaning anything. The bank
then deposited the mortgage note in an account they opened under your name without
your authorization or knowledge. The bank withdrew the money without your
authorization or knowledge using a forged signature. The bank then claimed the money
was the banks’ property, which is a fraudulent conversion.

The mortgage note was deposited or debited (asset) and credited to a Direct Deposit
Account, (DDA) (liability). The credit to Direct Deposit Account (liability) was used
from which to issue the check. The bank just switched the currency. The bank demands
that you cannot use the same currency, which the bank deposited (promissory notes or

mortgage notes) to discharge your mortgage note. The bank refuses to loan you other
depositors’ money, or pay the liability it owes you for having deposited your mortgage
note.

To pay this liability the bank must return the mortgage note to you. However instead of
the bank paying the liability it owes you, the bank demands you use these unpaid bank
liabilities, created in the alleged loan process, as the new currency. Now you must labor
to earn the bank currency (unpaid liabilities created in the alleged loan process) to pay
back the bank. What the bank received for free, the individual lost in equity.

If you tried to repay the bank in like kind currency, (which the bank deposited without
your authorization to create the check they issued you), then the bank claims the
promissory note is not money. They want payment to be in legal tender (check book
money).

The mortgage note is the money the bank uses to buy your property in the foreclosure.
They get your real property at no cost. If they accept your promissory note to discharge
the mortgage note, the bank can use the promissory note to buy your home if you sell it.
Their problem is, the promissory note stops the interest and there is no lien on the
property. If you sell the home before the bank can find out and use the promissory note to
buy the home, the bank lost. The bank claims they have not bought the home at no cost.
Question is, what right does the bank have to receive the mortgage note at no cost in
direct violation of the contract they wrote and refused to sign or fulfill.

By demanding that the bank fulfill the contract and not change the currency, the bank
must deposit your second promissory note to create check book money to end the fraud,
putting everyone back in the same position they where, prior to the fraud, in the first
place. Then all the homes, farms, ranches, cars and businesses in this country would be
redeemed and the equity returned to the rightful owners (the people). If not, every time
the homes are refinanced the banks get the equity for free. You and I must labor 20 to 30
years full time as the bankers sit behind their desks, laughing at us because we are too
stupid to figure it out or to force them to fulfill their contract.

The $100,000 created inflation and this increases the equity value of the homes. On an
average homes are refinanced every 7 1/2 years. When the home is refinanced the bank
again receives the equity for free. What the bank receives for free the alleged borrower
loses to the bank.

According to the Federal Reserve Banks’ own book of Richmond, Va. titled “YOUR
MONEY” page seven, “…demand deposit accounts are not legal tender…” If a
promissory note is legal tender, the bank must accept it to discharge the mortgage note.
The bank changed the currency from the money deposited, (mortgage note) to check
book money (liability the bank owes for the mortgage note deposited) forcing us to labor
to pay interest on the equity, in real property (real estate) the bank received for free. This
cost was not disclosed in NOTICE TO CUSTOMER REQUIRED BY FEDERAL
LAW, Federal Reserve Regulation Z.

When a bank says they gave you credit, they mean they credited your transaction
account, leaving you with the presumption that they deposited other depositors money in
the account. The fact is they deposited your money (mortgage note). The bank cannot

claim they own the mortgage note until they loan you their money. If bank deposits your
money, they are to credit a Demand Deposit Account under your name, so you can write
checks and spend your money. In this case they claim your money is their money. Ask a
criminal attorney what happens in a fraudulent conversion of your funds to the bank’s use
and benefit, without your signature or authorization.

What the banks could not win voluntarily, through deception they received for free.
Several presidents, John Adams, Thomas Jefferson, and Abraham Lincoln believed that
banker capitalism was more dangerous to our liberties than standing armies. U.S.
President James A. Garfield said, “Whoever controls the money in any country is
absolute master of industry and commerce.”

The Chicago Federal Reserve Bank’s book,”Modern Money Mechanics”, explains exactly
how the banks expand and contract the checkbook money supply forcing people into
foreclosure. This could never happen if contracts were not violated and if we received
equal protection under the law of Contract.

HOW THE BANK SWITCHES THE CURRENCY
This is a repeat worded differently to be sure you understand it.
You must understand the currency switch.

The bank does not loan money. The bank merely switches the currency. The alleged
borrower created money or currency by simply signing the mortgage note. The bank does
not sign the mortgage note because they know they will not loan you their money. The
mortgage note acts like money. To make it look like the bank loaned you money the bank
deposits your mortgage note (lien on property) as money from which to issue a check. No
money was loaned to legally fulfill the contract for the bank to own the mortgage note.
By doing this, the bank received the lien on the property without risking or using one
cent. The people lost the equity in their homes and farms to the bank and now they must
labor to pay interest on the property, which the bank got for free and they lost.

The check is not money, the check merely transfers money and by transferring money the
check acts LIKE money. The money deposited is the mortgage note. If the bank never
fulfills the contract to loan money, then the bank does not own the mortgage note. The
deposited mortgage note is still your money and the checking account they set up in your
name, which they credited, from which to issue the check, is still your money. They only
returned your money in the form of a check. Why do you have to fulfill your end of the
agreement if the bank refuses to fulfill their end of the agreement? If the bank does not
loan you their money they have not fulfilled the agreement, the contract is void.

You created currency by simply signing the mortgage note. The mortgage note has
value because of the lien on the property and because of the fact that you are to repay the
loan. The bank deposits the mortgage note (currency) to create a check (currency, bank
money). Both currencies cost nothing to create. By law the bank cannot create currency
(bank money, a check) without first depositing currency, (mortgage note) or legal tender.

For the check to be valid there must be mortgage note or bank money as legal tender, but
the bank accepted currency (mortgage note) as a deposit without telling you and without
your authorization.

The bank withdrew your money, which they deposited without telling you and withdrew
it without your signature, in a fraudulent conversion scheme, which can land the bankers
in jail but is played out in every City and Town in this nation on a daily basis. Without
loaning you money, the bank deposits your money (mortgage note), withdraws it
and claims it is the bank’s money and that it is their money they loaned you.

It is not a loan, it is merely an exchange of one currency for another, they’ll owe you the
money, which they claimed they were to loan you. If they do not loan the money and
merely exchange one currency for another, the bank receives the lien on your property for
free. What they get for free you lost and must labor to pay back at interest.

If the banks loaned you legal tender, they could not receive the liens on nearly every
home, car, farm, and business for free. The people would still own the value of their
homes. The bank must sell your currency (mortgage note) for legal tender so if you use
the bank’s currency (bank money), and want to convert currency (bank money) to legal
tender they will be able to make it appear that the currency (bank money) is backed by
legal tender. The bank’s currency (bank money) has no value without your currency
(mortgage note). The bank cannot sell your currency (mortgage note) without fulfilling
the contract by loaning you their money. They never loaned money, they merely
exchanged one currency for another. The bank received your currency for free, without
making any loan or fulfilling the contract, changing the cost and the risk of the contract
wherein they refused to sign, knowing that it is a change of currency and not a loan.

If you use currency (mortgage note), the same currency the bank deposited to create
currency (bank money), to pay the loan, the bank rejects it and says you must use
currency (bank money) or legal tender. The bank received your currency (mortgage note)
and the bank’s currency (bank money) for free without using legal tender and without
loaning money thereby refusing to fulfill the contract. Now the bank switches the
currency without loaning money and demands to receive your labor to pay what was not
loaned or the bank will use your currency (mortgage note) to buy your home in
foreclosure, The Revolutionary war was fought to stop these bank schemes. The bank has
a written policy to expand and contract the currency (bank money), creating recessions,
forcing people out of work, allowing the banks to obtain your property for free.

If the banks loaned legal tender, this would never happen and the home would cost much
less. If you allow someone to obtain liens for free and create a new currency, which is not
legal tender and you must use legal tender to repay. This changes the cost and the risk.

Under this bank scheme, even if everyone in the nation owned their homes and farms
debt free, the banks would soon receive the liens on the property in the loan process. The
liens the banks receive for free, are what the people lost in property, and now must labor
to pay interest on. The interest would not be paid if the banks fulfilled the contract they
wrote. If there is equal protection under the law and contract, you could get the mortgage
note back without further labor. Why should the bank get your mortgage note and your

labor for free when they refuse to fulfill the contract they wrote and told you to sign?

Sorry for the redundancy, but it is important for you to know by heart their “shell game”,
I will continue in that redundancy as it is imperative that you understand the principle.
The following material is case law on the subject and other related legal issues as well as
a summary.

LOGIC AS EVIDENCE

The check was written without deducting funds from Savings Account or Certificate of
Deposit allowing the mortgage note to become the new pool of money owed to Demand
Deposit Account, Savings Account, Certificate of Deposit with Demand Deposit, Savings
Account, and/or Certificate of Deposit increasing by the amount of the mortgage note. In
this case the bankers sell the mortgage note for Federal Reserve Bank Notes or other
assets while still owing the liability for the mortgage note sold and without the bank
giving up any- Federal Reserve Bank Notes.

If the bank had to part with Federal Reserve Bank Notes, and without the benefit of
checks to hide the fraudulent conversion of the mortgage note from which it issues the
check, the bank fraud would be exposed.

Federal Reserve Bank Notes are the only money called legal tender. If only Federal
Reserve Bank Notes are deposited for the credit to Demand Deposit Account- Savings
Account, Certificate of Deposit, and if the bank wrote a check for the mortgage note, the
check then transfers Federal Reserve Bank Notes and the bank gives the borrower a bank
asset. There is no increase in the check book money supply that exists in the loan process.

The bank policy is to increase bank liabilities; Demand Deposit Account, Savings
Account, Certificate of Deposit, by the mortgage note. If the mortgage note is money,
then the bank never gave up a bank asset. The bank simply used fraudulent conversion of
ownership of the mortgage note. The bank cannot own the mortgage note until the bank
fulfills the contract.

The check is not the money; the money is the deposit that makes the check good. In this
case, the mortgage note is the money from which the check is issued. Who owns the
mortgage note when the mortgage note is deposited? The borrower owns the mortgage
note because the bank never paid money for the mortgage note and never loaned money
(bank asset). The bank simply claimed the bank owned the mortgage note without paying
for it and deposited the mortgage note from which the check was issued. This is
fraudulent conversion. The bank risked nothing! Not even one penny was invested. They
never took money out of any account, in order to own the mortgage note, as proven by
the bookkeeping entries, financial ratios, the balance sheet, and of course the bank’s
literature. The bank simply never complied with the contract.

If the mortgage note is not money, then the check is check kiting and the bank is
insolvent and the bank still never paid. If the mortgage note is money, the bank took our
money without showing the deposit, and without paying for it, which is fraudulent
conversion. The bank claimed it owned the mortgage note without paying for it, then sold

the mortgage note, took the cash and never used the cash to pay the liability it owed for
the check the bank issued. The liability means that the bank still owes the money. The
bank must return the mortgage note or the cash it received in the sale, in order to pay the
liability. Even if the bank did this, the bank still never loaned us the bank’s money, which
is what ‘loan’ means. The check is not money but merely an order to pay money. If the
mortgage note is money then the bank must pay the check by returning the mortgage
note.

The only way the bank can pay Federal Reserve Bank Notes for the check issued is to sell
the mortgage note for Federal Reserve Bank Notes. Federal Reserve Bank Notes are
non-redeemable in violation of the UCC. The bank forces us to trade in non-redeemable
private bank notes of which the bank refuses to pay the liability owed. When we present
the Federal Reserve Bank Notes for payment the bank just gives us back another Federal
Reserve Bank Note which the bank paid 2 1/2 cents for per bill regardless of
denomination.

What a profit for the bank!

The check issued can only be redeemed in Federal Reserve Bank Notes, which the bank
obtained by selling the mortgage note that they paid nothing for.

The bank forces us to trade in bank liabilities, which they never redeem in an asset. We
the people are forced to give up our assets to the bank for free, and without cost to the
bank. This is fraudulent conversion making the contract, which the bank created with
their policy of bookkeeping entries, illegal and the alleged contract null and void.

The bank has no right to the mortgage note or to a lien on the property, until the bank
performs under the contract. The bank had less than ten percent of Federal Reserve Bank
Notes to back up the bank liabilities in Demand Deposit Account, Savings Account, or
Certificate of Deposit’s. A bank liability to pay money is not money. When we try and
repay the bank in like funds (such as is the banks policy to deposit from which to issue
checks) they claim it is not money. The bank’s confusing and deceptive trade practices
and their alleged contracts are unconscionable.

SUMMARY OF DAMAGES

The bank made the alleged borrower a depositor by depositing a $100,000 negotiable
instrument, which the bank sold or had available to sell for approximately $100,000 in
legal tender. The bank did not credit the borrower’s transaction account showing that the
bank owed the borrower the $100,000. Rather the bank claimed that the alleged borrower
owed the bank the $100,000, then placed a lien on the borrower’s real property for
$100,000 and demanded loan payments or the bank would foreclose.

The bank deposited a non-legal tender negotiable instrument and exchanged it for another
non legal tender check, which traded like money, using the deposited negotiable
instrument as the money deposited. The bank changed the currency without the
borrower’s authorization. First by depositing non legal tender from which to issue a check
(which is non-legal tender) and using the negotiable instrument (your mortgage note), to
exchange for legal tender, the bank needed to make the check appear to be backed by

legal tender. No loan ever took place. Which shell hides the little pea?

The transaction that took place was merely a change of currency (without authorization),
a negotiable instrument for a check. The negotiable instrument is the money, which can
be exchanged for legal tender to make the check good. An exchange is not a loan. The
bank exchanged $100,000 for $100,000. There was no need to go to the bank for any
money. The customer (alleged borrower) did not receive a loan, the alleged borrower lost
$100,000 in value to the bank, which the bank kept and recorded as a bank asset and
never loaned any of the bank’s money.

In this example, the damages are $100,000 plus interest payments, which the bank
demanded by mail. The bank illegally placed a lien on the property and then threatened to
foreclose, further damaging the alleged borrower, if the payments were not made. A
depositor is owed money for the deposit and the alleged borrower is owed money for the
loan the bank never made and yet placed a lien on the real property demanding payment.

Damages exist in that the bank refuses to loan their money. The bank denies the
alleged borrower equal protection under the law and contract, by merely exchanging one
currency for another and refusing repayment in the same type of currency deposited. The
bank refused to fulfill the contract by not loaning the money, and by the bank refusing to
be repaid in the same currency, which they deposited as an exchange for another
currency. A debt tender offered and refused is a debt paid to the extent of the offer. The
bank has no authorization to alter the alleged contract and to refuse to perform by not
loaning money, by changing the currency and then refusing repayment in what the bank
has a written policy to deposit.

The seller of the home received a check. The money deposited for the check issued came
from the borrower not the bank. The bank has no right to the mortgage note until the bank
performs by loaning the money.

In the transaction the bank was to loan legal tender to the borrower, in order for the bank
to secure a lien. The bank never made the loan, but kept the mortgage note the alleged
borrower signed. This allowed the bank to obtain the equity in the property (by a lien)
and transfer the wealth of the property to the bank without the bank’s investment, loan, or
risk of money. Then the bank receives the alleged borrower’s labor to pay principal and
Usury interest. What the people owned or should have owned debt free, the bank
obtained ownership in, and for free, in exchange for the people receiving a debt, paying
interest to the bank, all because the bank refused to loan money and merely exchanged
one currency for another. This places you in perpetual slavery to the bank because the
bank refuses to perform under the contract. The lien forces payment by threat of
foreclosure. The mail is used to extort payment on a contract the bank never fulfilled.

If the bank refuses to perform, then they must return the mortgage note. If the bank
wishes to perform, then they must make the loan. The past payments must be returned
because the bank had no right to lien the property and extort interest payments. The bank
has no right to sell a mortgage note for two reasons. The mortgage note was deposited
and the money withdrawn without authorization by using a forged signature and; two, the
contract was never fulfilled. The bank acted without authorization and is involved in a

fraud thereby damaging the alleged borrower.

Excerpts From “Modem Money Mechanics” Pages 3 & 6

What Makes Money Valuable? In the United States neither paper currency nor deposits
have value as commodities. Intrinsically, a dollar bill is just a piece of paper, deposits
merely book entries. Coins do have some intrinsic value as metal, but generally far less
than face value.

Then, bankers discovered that they could make loans merely by giving their promises to
pay, or bank notes, to borrowers, in this way, banks began to create money. More notes
could be issued than the gold and coin on hand because only a portion of the notes
outstanding would be presented for payment at any one time. Enough metallic money
had to be kept on hand, of course, to redeem whatever volume of notes was presented for
payment.

Transaction deposits are the modem counterpart of bank notes. It was a small step from
printing notes to making book entries crediting deposits of borrowers, which the
borrowers in turn could “spend” by writing checks, thereby “printing” their own money.

Notes, exchange just like checks.

How do open market purchases add to bank reserves and deposits? Suppose the Federal
Reserve System, through its trading desk at the Federal Reserve Bank of New York, buys
$10,000 of Treasury bills from a dealer in U.S. government securities. In today’s world
of Computer financial transactions, the Federal Reserve Bank pays for the securities
with an “electronic” check drawn on itself. Via its “Fedwire” transfer network, the
Federal Reserve notifies the dealer’s designated bank (Bank A) that payment for the
securities should be credited to (deposited in) the dealer’s account at Bank A. At the
same time, Bank A’s reserve account at the Federal Reserve is credited for the amount of
the securities purchased. The Federal Reserve System has added $10,000 of securities to
its assets, which it has paid for, in effect, by creating a liability on itself in the form of
bank reserve balances. These reserves on Bank A’s books are matched by $10,000 of the
dealer’s deposits that did not exist before.

If business is active, the banks with excess reserves probably will have opportunities to
loan the $9,000. Of course, they do not really pay out loans from money they receive as
deposits. If they did this, no additional money would be created. What they do when they
make loans is to accept promissory notes in exchange for credits to tile borrower’s
transaction accounts. Loans (assets) and deposits (liabilities) both rise by $9,000.
Reserves are unchanged by the loan transactions. But the deposit credits constitute new
additions to the total deposits of the banking system.

PROOF BANKS DEPOSIT NOTES AND ISSUE BANK CHECKS. THE CHECKS
ARE ONLY AS GOOD AS THE PROMISSORY NOTE. NEARLY ALL BANK
CHECKS ARE CREATED FROM PRIVATE NOTES. FEDERAL RESERVE BANK
NOTES ARE A PRIVATE CORPORATE NOTE (Chapter 48, 48 Stat 112) WE USE
NOTES TO DISCHARGE NOTES.

Excerpt from booklet Your Money, page 7: Other M1 Money

While demand deposits, traveler’s checks, and interest-bearing accounts with unlimited
checking authority are not legal tender, they are usually acceptable in payment for
purchases of goods and services.

75. “In the federal courts, it is well established that a national bank has not power to
lend its credit to another by becoming surety, indorser, or guarantor for him.”’
Farmers and Miners Bank v. Bluefield Nat ‘l Bank, 11 F 2d 83, 271 U.S. 669.

77. “The doctrine of ultra vires is a most powerful weapon to keep private corporations
within their legitimate spheres and to punish them for violations of their corporate
charters, and it probably is not invoked too often .. .” Zinc Carbonate Co. v. First
National Bank, 103 Wis 125, 79 NW 229. American Express Co. v. Citizens State
Bank, 194 NW 430.

78. “A bank may not lend its credit to another even though such a transaction turns out
to have been of benefit to the bank, and in support of this a list of cases might be
cited, which-would look like a catalog of ships.” [Emphasis added] Norton Grocery
Co. v. Peoples Nat. Bank, 144 SE 505. 151 Va 195.

79. “It has been settled beyond controversy that a national bank, under federal Law
being limited in its powers and capacity, cannot lend its credit by guaranteeing the
debts of another. All such contracts entered into by its officers are ultra vires . . .”
Howard & Foster Co. v. Citizens Nat’l Bank of Union, 133 SC 202, 130 SE
759(1926).

81. “Neither, as included in its powers not incidental to them, is it a part of a
bank’s business to lend its credit. If a bank could lend its credit as well as its money,
it might, if it received compensation and was careful to put its name only to solid
paper, make a great deal more than any lawful interest on its money would amount
to. If not careful, the power would be the mother of panics . . . Indeed, lending
credit is the exact opposite of lending money, which is the real business of a bank,
for while the latter creates a liability in favor of the bank, the former gives rise to a
liability of the bank to another. I Morse. Banks and Banking 5th Ed. Sec 65; Magee,

82. “It is not within those statutory powers for a national bank, even though solvent, to
lend its credit to another in any of the various ways in which that might be done.”
Federal Intermediate Credit Bank v. L ‘Herrison, 33 F 2d 841, 842 (1929).

83. “There is no doubt but what the law is that a national bank cannot lend its credit or
become an accommodation endorser.” National Bank of Commerce v. Atkinson, 55
E 471.

85. “.. . the bank is allowed to hold money upon personal security; but it must be money
that it loans, not its credit.” Seligman v. Charlottesville Nat. Bank, 3 Hughes 647,
Fed Case No.12, 642, 1039.

86. “A loan may be defined as the delivery by one party to, and the receipt by another
party of, a sum of money upon an agreement, express or implied, to repay the sum
with or without interest.” Parsons v. Fox 179 Ga 605, 176 SE 644. Also see
Kirkland v. Bailey, 155 SE 2d 701 and United States v. Neifert White Co., 247 Fed
Supp 878, 879.

90. “A check is merely an order on a bank to pay money.” Young v. Hembree, 73 P2d
393.

91. “Any false representation of material facts made with knowledge of falsity and with
intent that it shall be acted on by another in entering into contract, and which is so
acted upon, constitutes ‘fraud,’ and entitles party deceived to avoid contract or
recover damages.” Barnsdall Refining Corn. v. Birnam Wood Oil Co.. 92 F 26 817.

92. “Any conduct capable of being turned into a statement of fact is representation.
There is no distinction between misrepresentations effected by words and
misrepresentations effected by other acts.” Leonard v. Springer 197 Ill 532. 64 NE
301.

93. “If any part of the consideration for a promise be illegal, or if there are several
considerations for an unseverable promise one of which is illegal, the promise,
whether written or oral, is wholly void, as it is impossible to say what part or which

94. “The contract is void if it is only in part connected with the illegal transaction and
the promise single or entire.” Guardian Agency v. Guardian Mut. Savings Bank,
227 Wis 550, 279 NW 83.

95. “It is not necessary for rescission of a contract that the party making the
misrepresentation should have known that it was false, but recovery is allowed even
though misrepresentation is innocently made, because it would be unjust to allow
one who made false representations, even innocently, to retain the fruits of a
bargain induced by such representations.” Whipp v. Iverson, 43 Wis 2d 166.

97. In a Debtor’s RICO action against its creditor, alleging that the creditor had
collected an unlawful debt, an interest rate (where all loan charges were added
together) that exceeded, in the language of the RICO Statute, “twice the enforceable
rate.” The Court found no reason to impose a requirement that the Plaintiff show
that the Defendant had been convicted of collecting an unlawful debt, running a
“loan sharking” operation. The debt included the fact that exaction of a usurious
interest rate rendered the debt unlawful and that is all that is necessary to support
the Civil RICO action. Durante Bros. & Sons, Inc. v. Flushing Nat ‘l Bank. 755 F2d
239, Cert. denied, 473 US 906 (1985).

98. The Supreme Court found that the Plaintiff in a civil RICO action need establish
only a criminal “violation” and not a criminal conviction. Further, the Court held
that the Defendant need only have caused harm to the Plaintiff by the commission
of a predicate offense in such a way as to constitute a “pattern of Racketeering
activity.” That is, the Plaintiff need not demonstrate that the Defendant is an
organized crime figure, a mobster in the popular sense, or that the Plaintiff has
suffered some type of special Racketeering injury; all that the Plaintiff must show is
what the Statute specifically requires. The RICO Statute and the civil remedies for
its violation are to be liberally construed to effect the congressional purpose as
broadly formulated in the Statute. Sedima, SPRL v. Imrex Co., 473 US 479 (1985).

DEFINITIONS TO KNOW WHEN EXAMINING A BANK CONTRACT

BANK ACCOUNT: A sum of money placed with a bank or banker, on deposit, by a
customer, and subject to be drawn out on the latter’s check.

BANK: whose business it is to receive money on deposit, cash checks or drafts, discount
commercial paper, make loans and issue promissory notes payable to bearer, known as
bank notes.

BANK CREDIT: A credit with a bank by which, on proper credit rating or proper
security given to the bank, a person receives liberty to draw to a certain extent agreed
upon.

BANK DEPOSIT: Cash, checks or drafts placed with the bank for credit to depositor’s
account. Placement of money in bank, thereby, creating contract between bank and
depositors.

DEMAND DEPOSIT: The right to withdraw deposit at any time.

BANK DEPOSITOR: One who delivers to, or leaves with a bank a sum of money
subject to his order.

BANK DRAFT: A check, draft or other form of payment.

ANK OF ISSUE: Bank with the authority to issue notes which are intended to circulate
as currency.

LOAN: Delivery by one party to, and receipt by another party, a sum of money upon
agreement, express or implied, to repay it with or without interest.

CONSIDERATION: The inducement to a contract. The cause, motive, price or
impelling influences, which induces a contracting, party to enter into a contract. The
reason, or material cause of a contract.

CHECK: A draft drawn upon a bank and payable on demand, signed by the maker or
drawer, containing an unconditional promise to pay a certain sum in money to the order
of the payee. The Federal Reserve Board defines a check as, “…a draft or order upon a
bank or banking house purporting to be drawn upon a deposit of funds for the payment at
all events of, a certain sum of money to a certain person therein named, or to him or his
order, or to bearer and payable instantly on demand of.”

QUESTIONS ONE MIGHT ASK THE BANK IN AN INTERROGATORY

Did the bank loan gold or silver to the alleged borrower?

Did the bank loan credit to the alleged borrower?

Did the borrower sign any agreement with the bank, which prevents the borrower from
repaying the bank in credit?

Is it true that your bank creates check book money when the bank grants loans, simply by
adding deposit dollars to accounts on the bank’s books, in exchange, for the borrower’s
mortgage note?

Has your bank, at any time, used the borrower’s mortgage note, “promise to pay”, as a
deposit on the bank’s books from which to issue bank checks to the borrower?

At the time of the loan to the alleged borrower, was there one dollar of Federal Reserve
Bank Notes in the bank’s possession for every dollar owed in Savings Accounts,
Certificates of Deposits and check Accounts (Demand Deposit Accounts) for every dollar
of the loan?

According to the bank’s policy, is a promise to pay money the equivalent of money?

Does the bank have a policy to prevent the borrower from discharging the mortgage note
in “like kind funds” which the bank deposited from which to issue the check?

Does the bank have a policy of violating the Deceptive Trade Practices Act?

When the bank loan officer talks to the borrower, does the bank inform the borrower that
the bank uses the borrowers mortgage note to create the very money the bank loans out to
the borrower?

Does the bank have a policy to show the same money in two separate places at the same
time?

Does the bank claim to loan out money or credit from savings and certificates of deposits
while never reducing the amount of money or credit from savings accounts or certificates
of deposits, which customers can withdraw from?

Using the banking practice in place at the time the loan was made, is it theoretically
possible for the bank to have loaned out a percentage of the Savings Accounts and
Certificates of Deposits?

If the answer is “no” to question #13, explain why the answer is no.

In regards to question #13, at the time the loan was made, were there enough Federal
Reserve Bank Notes on hand at the bank to match the figures represented by every
Savings Account and Certificate of Deposit and checking Account (Demand Deposit
Account)?

Does the bank have to obey, the laws concerning, Commercial Paper; Commercial
Transactions, Commercial Instruments, and Negotiable Instruments?

Did the bank lend the borrower the bank’s assets, or the bank’s liabilities?

What is the complete name of the banking entity, which employs you, and in what
jurisdiction is the bank chartered?

What is the bank’s definition of “Loan Credit”?

Did the bank use the borrowers assumed mortgage note to create new bank money, which

did not exist before the assumed mortgage note was signed?

Did the bank take money from any Demand Deposit Account (DDA), Savings Account
(SA), or a Certificate of Deposit (CD), or any combination of any Demand Deposit
Account, Savings Account or Certificate of Deposit, and loan this money to the
borrower?

Did the bank replace the money or credit, which it loaned to the borrower with the
borrower’s assumed mortgage note?

Did the bank take a bank asset called money, or the credit used as collateral for
customers’ bank deposits, to loan this money to the borrower, and/or did the bank use the
borrower’s note to replace the asset it loaned to the borrower?

Did the money or credit, which the bank claims to have loaned to the borrower, come
from deposits of money or credit made by the bank’s customers, excluding the borrower’s
assumed mortgage note?

Considering the balance sheet entries of the bank’s loan of money or credit to the
borrower, did the bank directly decrease the customer deposit accounts (i.e. Demand
Deposit Account, Savings Account, and Certificate of Deposit) for the amount of the
loan?

Describe the bookkeeping entries referred to in question #13.

Did the bank’s bookkeeping entries to record the loan and the borrower’s assumed
mortgage note ever, at any time, directly decrease the amount of money or credit from
any specific bank customer’s deposit account?

Does the bank have a policy or practice to work in cooperation with other banks or
financial institutions use borrower’s mortgage note as collateral to create an offsetting
amount of new bank money or credit or check book money or Demand Deposit Account
generally to equal the amount of the alleged loan?

Regarding the borrowers assumed mortgage loan, give the name of the account which
was debited to record the mortgage.

Regarding the bookkeeping entry referred to in Interrogatory #17, state the name and
purpose of the account, which was credited.

When the borrower’s assumed mortgage note was debited as a bookkeeping entry, was
the offsetting entry a credit account?

Regarding the initial bookkeeping entry to record the borrower’s assumed mortgage note
and the assumed loan to the borrower, was the bookkeeping entry credited for the money
loaned to the borrower, and was this credit offset by a debit to record the borrower’s
assumed mortgage note?

Does the bank currently or has it ever at anytime used the borrower’s assumed mortgage
note as money to cover the bank’s liabilities referred to above, i.e. Demand Deposit
Account, Savings Account and Certificate of Deposit?

When the assumed loan was made to the borrower, did the bank have every Demand
Deposit Account, Savings Account, and Certificate of Deposit backed up by Federal
Reserve Bank Notes on hand at the bank?

Does the bank have an established policy and practice to emit bills of credit which it
creates upon its books at the time of making a loan agreement and issuing money or so-
called money of credit, to its borrowers?

SUMMARY

The bank advertised it would loan money, which is backed by legal tender. Is not that
what the symbol $ means? Is that not what the contract said? Do you not know there is no
agreement or contract in the absence of mutual consent? The bank may say that they gave
you a check, you owe the bank money. This information shows you that the check came
from the money the alleged borrower provided and the bank never loaned any money
from other depositors.

I’ve shown you the law and the bank’s own literature to prove my case. All the bank
did was trick you. They get your mortgage note without investing one cent, by making
you a depositor and not a borrower. The key to the puzzle is, the bank did not sign the
contract. If they did they must loan you the money. If they did not sign it, chances
are, they deposited the mortgage note in a checking account and used it to issue a
check without ever loaning you money or the bank investing one cent.

Our Nation, along with every State of the Union, entered into Bankruptcy, in 1933. This
changes the law from “gold and silver” legal money and “common law” to the law of
bankruptcy. Under Bankruptcy law the mortgage note acts like money. Once you sign the
mortgage note it acts like money. The bankers now trick you into thinking they loaned
you legal tender, when they never loaned you any of their money.

The trick is they made you a depositor instead of a borrower. They deposited your
mortgage note and issued a bank check. Neither the mortgage note nor the check is
legal tender. The mortgage note and the check are now money created that never existed,
prior. The bank got your mortgage note for free without loaning you money, and sold the
mortgage note to make the bank check appear legal. The borrower provided the legal
tender, which the bank gave back in the form of a check. If the bank loaned legal tender,
as the contract says, for the bank to legally own the mortgage note, then the people
would still own the homes, farms, businesses and cars, nearly debt free and pay little, if
any interest. By the banks not fulfilling the contract by loaning legal tender, they
make the alleged borrower, a depositor. This is a fraudulent conversion of the
mortgage note. A Fraud is a felony.

The bank had no intent to loan, making it promissory fraud, mail fraud, wire fraud, and a
list of other crimes a mile long. How can they make a felony, legal? They cannot! Fraud

is fraud!

The banks deposit your mortgage note in a checking account. The deposit becomes the
bank’s property. They withdraw money without your signature, and call the money, the
banks money that they loaned to you. The bank forgot one thing. If the bank deposits
your mortgage note, then the bank must credit your checking account claiming the bank
owes you $100,000 for the $100,000 mortgage note deposited. The credit of $100,000 the
bank owes you for the deposit allows you to write a check or receive cash. They did not
tell you they deposited the money, and they forget to tell you that the $100,000 is money
the banks owe you, not what you owe the bank. You lost $100,000 and the bank gained
$100,000. For the $100,000 the bank gained, the bank received government bonds or
cash of $100,000 by selling the mortgage note. For the loan, the bank received $100,000
cash, the bank did not give up $100,000.

Anytime the bank receives a deposit, the bank owes you the money. You do not owe the
bank the money.

If you or I deposit anyone’s negotiable instrument without a contract authorizing it, and
withdraw the money claiming it is our money, we would go to jail. If it was our policy to
violate a contract, we could go to jail for a very long time. You agreed to receive a loan,
not to be a depositor and have the bank receive the deposit for free. What the bank got for
free (lien on real property) you lost and now must pay with interest.

If the bank loaned us legal tender (other depositors’ money) to obtain the mortgage note
the bank could never obtain the lien on the property for free. By not loaning their money,
but instead depositing the mortgage note the bank creates inflation, which costs the
consumer money. Plus the economic loss of the asset, which the bank received for free, in
direct violation of any signed agreement.

We want equal protection under the law and contract, and to have the bank fulfill the
contract or return the mortgage note. We want the judges, sheriffs, and lawmakers to
uphold their oath of office and to honor and uphold the founding fathers U.S.
Constitution. Is this too much to ask?

What is the mortgage note? The mortgage note represents your future loan payments. A
promise to pay the money the bank loaned you. What is a lien? The lien is a security on
the property for the money loaned.

How can the bank promise to pay money and then not pay? How can they take a promise
to pay and call it money and then use it as money to purchase the future payments of
money at interest. Interest is the compensation allowed by law or fixed by the parties for
the use or forbearance of borrowed money. The bank never invested any money to
receive your mortgage note. What is it they are charging interest on?

The bank received an asset. They never gave up an asset. Did they pay interest on the
money they received as a deposit? A check issued on a deposit received from the
borrower cost the bank nothing? Where did the money come from that the bank invested
to charge interest on?

The bank may say we received a benefit. What benefit? Without their benefit we would
receive equal protection under the law, which would mean we did not need to give up an
asset or pay interest on our own money! Without their benefit we would be free and not
enslaved. We would have little debt and interest instead of being enslaved in debt and
interest. The banks broke the contract, which they never intended to fulfill in the first
place. We got a check and a house, while they received a lien and interest for free,
through a broken contract, while we got a debt and lost our assets and our country. The
benefit is the banks, who have placed liens on nearly every asset in the nation, without
costing the bank one cent. Inflation and working to pay the bank interest on our own
money is the benefit. Some benefit!

What a Shell Game. The Following case was an actual trial concerning the issues we
have covered. The Judge was extraordinary in-that he had a grasp of the
Constitution that I haven’t seen often enough in our courts. This is the real thing,
absolutely true. This case was reviewed by the Minnesota Supreme Court on their
own motion. The last thing in the world that the Bankers and the Judges wanted
was case law against the Bankers. However, this case law is real.

STATE OF MINNESOTA IN JUSTICE COURT COUNTY OF SCOTT
TOWNSHIP OF
CREDIT RIVER

)MARTIN V. MAHONEY, JUSTICE

FIRST BANK OF MONTGOMERY, Plaintiff, ) CASE NO: 19144

Vs. ) JUDGMENT AND DECREE

Jerome Daly, Defendant. )

The above entitled action came on before the court and a jury of 12 on December 7, 1968
at 10:00 a.m. Plaintiff appeared by its President Lawrence V. Morgan and was
represented by its Counsel Theodore R. Mellby, Defendant appeared on his own behalf.

A jury of Talesmen were called, impaneled and sworn to try the issues in this case.
Lawrence V. Morgan was the only witness called for plaintiff and defendant testified as
the only witness in his own behalf.

Plaintiff brought this as a Common Law action for the recovery of the possession of lot
19, Fairview Beach, Scott County, Minn. Plaintiff claimed titled to the Real Property in
question by foreclosure of a Note and Mortgage Deed dated May 8, 1964 which plaintiff
claimed was in default at the time foreclosure proceedings were started. Defendant
appeared and answered that the plaintiff created the money and credit upon its own books
by bookkeeping entry as the legal failure of consideration for the Mortgage Deed and
alleged that the Sheriff’s sale passed no title to plaintiff. The issues tried to the jury were

whether there was a lawful consideration and whether Defendant had waived his rights to
complain about the consideration having paid on the note for almost 3 years. Mr. Morgan
admitted that all of the money or credit which was used as a consideration was created
upon their books that this was standard banking practice exercised by their bank in
combination with the Federal Reserve Bank of Minneapolis, another private bank, further
that he knew of no United States Statute of Law that gave the Plaintiff the authority to do
this. Plaintiff further claimed that Defendant by using the ledger book created credit and
by paying on the Note and Mortgage waived any right to complain about the
consideration and that Defendant was estopped from doing so. At 12:15 on December 7,
1968 the Jury returned a unanimous verdict for the Defendant. Now therefore by virtue of
the authority vested in me pursuant to the Declaration of Independence, the Northwest
Ordinance of 1787, the Constitution of the United States and the Constitution and laws of
the State Minnesota not inconsistent therewith.

IT IS HEREBY ORDERED, ADJUDGED AND DECREED

That Plaintiff is not entitled to recover the possession of lot 19, Fairview Beach, Scott
County, Minnesota according to the plat thereof on file in the Register of Deeds office.
That because of failure of a lawful consideration the note and Mortgage dated May 8,
1964 are null and void.

That the Sheriffs sale of the above described premises held on June 26, 1967 is null and
void, of no effect.

That Plaintiff has no right, title or interest in said premises or lien thereon, as is above
described.

That any provision in the Minnesota Constitution and any Minnesota Statute limiting the

Jurisdiction of this Court is repugnant to the Constitution of the United States and to the
Bill of Rights of the Minnesota Constitution and is null and void and that this Court has
Jurisdiction to render complete Justice in this cause.

That Defendant is awarded costs in the sum of $75.00 and execution is hereby issued
therefore.

A 10 day stay is granted.

The following memorandum and any supplemental memorandum made and filed by this
Court in support of this judgment is hereby made a part hereof by reference.

BY THE COURT

Dated December 9, 1969

MARTIN V. MAHONEY

Justice of the Peace Credit River Township Scott County, Minnesota

MEMORANDUM

The issues in this case were simple. There was no material dispute on the facts for the
jury to resolve. Plaintiff admitted that it, in combination with the Federal Reserve Bank
of Minneapolis, which are for all practical purposes because of their interlocking activity
and practices, and both being Banking Institutions Incorporated under the laws of the
United States, are in the Law to be treated as one and the same Bank, did create the entire
$14,000.00 in money or credit upon its own books by bookkeeping entry. That this was
the Consideration used to support the Note dated May 8, 1964 and the Mortgage of the
same date. The Money and credit first came into existence when they credited it.

Mr. Morgan admitted that no United States Law of Statute existed which gave him the
right to do this. A lawful consideration must exist and be tendered to support the note.
(See Anheuser Busch Brewing Co. v. Emma Mason, 44 Minn. 318. 46 NW 558.) The
Jury found there was no lawful consideration and I agree Only God can create something
of value out of nothing. Even if defendant could be charged with waiver or estoppel as a
matter of law this is no defense to the plaintiff. The law leaves wrongdoers where it finds
them. (See sections 50, 5 1, and 52 of Am Jur 2d “Actions” on page 584.”) No action will
lie to recover on a claim based upon, or in any manner depending upon, a fraudulent,
illegal, or immoral transaction or contract to which plaintiff was a party. Plaintiffs act of
creating is not authorized by the Constitution and Laws of the United States, is
unconstitutional and void, and is not lawful consideration in the eyes of the law to
support any thing or upon which any lawful rights can be built. Nothing in the
Constitution of the United States limits the jurisdiction of this Court, which is one of
original jurisdiction with right of trial by jury guaranteed.

This is a Common Law Action. Minnesota cannot limit or impair the power of this Court
to render complete justice between the parties. Any provisions in the Constitution and
laws of Minnesota which attempt to do so is repugnant to the Constitution of the United
States and void. No question as to the Jurisdiction of this Court was raised by either party
at the trial. Both parties were given complete liberty to submit any and all facts and law
to the jury, at least in so far as they saw it. No complaint was made by Plaintiff that
Plaintiff did not receive a fair trial. From the admissions made by Mr. Morgan the path of
duty was made direct and clear for the jury. Their verdict could not reasonably have been
otherwise. Justice was rendered completely and without purchase, conformable to the law
in this Court on December 7, 1968.

BY THE COURT

MARTIN V. MAHONEY

Justice of the Peace Credit River Township Scott County, Minnesota

Note: It has never been doubted that a note given on a consideration, which is prohibited
by law is void. It has been determined independent of Acts of Congress, that sailing
under the license of an enemy is illegal. The emission of Bills of Credit upon the books of
these private Corporations for the purposes of private gain is not warranted by the
Constitution of the United States and is unlawful. See Craig v. @ 4 peters reports 912,
This Court can tread only that path which is marked out by duty. M.V.M.

JUDGE MARTIN MAHONEY DECISION AS FOLLOWS

“For the Justice’s fees, the First National Bank deposited @ the Clerk of the District
Court the two Federal Reserve Bank Notes. The Clerk tendered the Notes to me (the
Judge). As Judge my sworn duty compelled me to refuse the tender. This is contrary to
the Constitution of the United States. The States have no power to make bank notes a
legal tender. Only gold and silver coin is a lawful tender.” (See American Jurist on
Money 36 sec.13.)

“Bank Notes are a good tender as money unless specifically objected to. Their consent
and usage is based upon the convertibility of such notes to coin at the pleasure of the
holder upon presentation to the bank for redemption. When the inability of a bank to
redeem its notes is openly avowed they instantly lose their character as money and their
circulation as currency ceases.” (See American Jurist 36-section 9). “There is no lawful
consideration for these Federal Reserve Bank Notes to circulate as money. The banks
actually obtained these notes for cost of printing – A lawful consideration must exist for a
Note. As a matter of fact, the “Notes” are not Notes at all, as they contain no promise to
pay.” (See 17 American Jurist section 85, 215) “The activity of the Federal Reserve
Banks of Minnesota, San Francisco and the First National Bank of Montgomery is
contrary to public policy and contrary to the Constitution of the United States, and
constitutes an unlawful creation of money, credit and the obtaining of money and credit
for no valuable consideration.

Activity of said banks in creating money and credit is not warranted by the Constitution
of the United States.” “The Federal Reserve Banks and National Banks exercise an
exclusive monopoly and privilege of creating credit and issuing Notes at the expense of
the public which does not receive a fair equivalent. This scheme is obliquely designed for
the benefit of an idle monopoly to rob, blackmail, and oppress the producers of wealth.
“The Federal Reserve Act and the National Bank Act are, in their operation and effect,
contrary to the whole letter and spirit of the Constitution of the United States, for they
confer an unlawful and unnecessary power on private parties; they hold all of our fellow
citizens in dependence; they are subversive to the rights and liberation of the people.”
“These Acts have defiled the lawfully constituted Government of the United States. The
Federal Reserve Act and the National Banking Act are not necessary and proper for
carrying into execution the legislative powers granted to Congress or any other powers
vested in the Government of the United States, but on the contrary, are subversive to the
rights of the People in their rights to life, liberty, and property.” (See Section 462 of Title
31 U. S. Code).

“The meaning of the Constitutional provision, ‘NO STATE SHALL make anything but
Gold and Silver Coin a legal tender ‘ payment of debts’ is direct, clear, unambiguous and
without any qualification. This Court is without authority to interpolate any exception.
My duty is simply to execute it, as and to pronounce the legal result. From an
examination of the case of Edwards v. Kearsey, Federal Reserve Bank Notes (fiat money)
which are attempted to be made a legal tender, are exactly what the authors of the

Constitution of the United States intend to prohibit. No State can make these Notes a
legal tender. Congress is incompetent to authorize a State to make the Notes a legal
tender. For the effect of binding Constitution provisions see Cooke v. Iverson. This
fraudulent Federal Reserve System and National Banking System has impaired the
obligation of Contract promoted disrespect for the Constitution and Law and has shaken
society to its foundation.” (See 96 U.S. Code 595 and 108 M 388 and 63 M 147)

“Title 31, U.S. Code, Section 432, is in direct conflict with the Constitution insofar, at
least, that it attempts to make Federal Reserve Bank Notes a legal tender. The
Constitution is the Supreme Law of the Land. Section 462 of Title 31 is not a law, which
is made in pursuance of the Constitution. It is unconstitutional and void, and I so hold.
Therefore, the two Federal Reserve Bank Notes are Null and Void for any lawful purpose
in so far as this case is concerned and are not a valid deposit of $2.00 with the Clerk of
the District Court for the purpose of effecting an Appeal from this Court to the District
Court.” “However, of these Federal Reserve Bank Notes, previously discussed, and that is
that the Notes are invalid, because of a theory that they are based upon a valid, adequate
or lawful consideration. At the hearing scheduled for January 22, 1969, at 7:00 P.M., Mr.
Morgan appeared at the trial; he appeared as a witness to be candid, open, direct,
experienced and truthful. He testified to years of experience with the Bank of America in
Los Angeles, the Marquette National Bank of Minnesota and the First National Bank of
Minnesota. He seemed to be familiar with the operation of the Federal Reserve System.
He freely admitted that his Bank created all of the money and credit upon its books with
which it acquired the Note and Mortgage of May 8, 1964. The credit first came into
existence when the Bank created it upon its books. Further, he freely admitted that no
United States Law gave the Bank the authority to do this. This was obviously no lawful
consideration for the Note.

The Bank parted with absolutely nothing except a little ink. In this case, the evidence was
on January 22, 1969 that the Federal Reserve Bank obtained the Notes for this seems to
be conferred by Title 12 USC Section 420. The cost is about 9/10th of a cent per Note
regardless of the amount of the Note. The Federal Reserve Banks create all of the money
and credit upon their books by bookkeeping entries by which they acquire United States
Securities. The collateral required to obtain the Note is, by section 412 USC, Title 12, a
deposit of a like amount of bonds. Bonds which the Banks acquire by creating money and
credit by bookkeeping entry.”

“No rights can be acquired by fraud. The Federal Reserve Bank Notes are acquired
through the use of unconstitutional statutes and fraud.” “The Common Law requires a
lawful consideration for any contract or Note. These Notes are void for failure at a lawful
consideration at Common Law, entirely apart from any Constitutional consideration.
Upon this ground, the Notes are ineffectual for any purpose. This seems to be the
principal objection to paper fiat money and the cause of its depreciation and failure down
through the ages. If allowed to continue, Federal Reserve Bank Notes will meet the same
fate. From the evidence introduced on January 22, 1969, this Court finds that as of March
18, 1969, all Gold and Silver backing is removed from Federal Reserve Bank Notes.”
“The law leaves wrongdoers where it finds them. (See I Mer. Jur 2nd on Actions Section
550).”Slavery and all its incidents, including Peonage, thralldom, and debt created by

fraud is universally prohibited in the United States. This case represents but another
refined form of Slavery by the Bankers. Their position is not supported by the
Constitution of the United States. The People have spoken their will in terms, which
cannot be misunderstood. It is indispensable to the preservation of the Union and
independence and liberties of the people that this Court, adhere only to the mandate of the
Constitution and administer it as it is written. I, therefore, hold these Notes in question
void and not effectual for any purpose.” (4) January 30, 1969

CREDIT LOANS AND VOID CONTRACTS PERFECT OBLIGATION AS TO A
HUMAN BEING AS TO A BANK

Furthermore, this Memorandum of law is offered in order to advance understanding of
the complex legal issues, present and embodied in the Common Law, with authorities,
law and cases in support of, which will constitute the following facts:

Privately owned banks are making loans of “credit” with the intended purpose of
circulating “credit” as “money”. Other financial institutions and individuals may
“launder” bank credit that they receive directly or indirectly from privately owned banks.
This collective activity is unconstitutional, unlawful, in violation of Common Law, U.S.
Code and the principles of equity. Such activity and underlying contracts have long been
held void, by State Courts, Federal Courts and the U.S. Supreme Court. This
Memorandum will demonstrate through authorities and established common law, that
credit “money creation” by privately owned bank corporations is not really “money
creation” at all. It is the trade specialty and artful illusion of law merchants, which use
old-time trade secrets of the Goldsmiths, to entrap the borrower and unjustly enrich the
lender through usury and other unlawful techniques. Issues based on law and the
principles of equity, which are within the jurisdiction of this Court, will be addressed.

THE GOLDSMITHS

In his book, Money and Banking (8th Edition, 1984), Professor David R. Kamerschen
writes on pages 56 -63: “The first bankers in the modern sense were the goldsmiths, who
frequently accepted bullion and coins for storage … One result was that the goldsmiths
temporarily could lend part of the gold left with them . . . These loans of their customers’
gold were soon replaced by a revolutionary technique. When people brought in gold, the
goldsmiths gave them notes promising to pay that amount of gold on demand. The notes,
first made payable to the order of the individual, were later changed to bearer obligations.
In the previous form, a note payable to the order of Jebidiah Johnson would be paid to no
one else unless Johnson had first endorsed the note … But notes were soon being used in
an unforeseen way. The note holders found that, when they wanted to buy something,
they could use the note itself in payment more conveniently and let the other person go
after the gold, which the person rarely did . . .The specie, then tended to remain in the
goldsmiths’ vaults. . . . The goldsmiths began to realize that they might profit handsomely
by issuing somewhat more notes than the amount of specie they held. . . These additional

notes would cost the goldsmiths nothing except the negligible cost of printing them, yet
the notes provided the goldsmiths with funds to lend at interest . . . .And they were to find
that the profitability of their lending operations would exceed the profit from their
original trade. The goldsmiths became bankers as their interest in manufacture of gold
items to sell was replaced by their concern with credit policies and lending activities . . .

They discovered early that, although an unlimited note issue would be unwise, they could
issue notes up to several times the amount of specie they held. The key to the whole
operation lay in the public’s willingness to leave gold and silver in the bank’s vaults and
use the bank’s notes. This discovery is the basis of modern banking: On page 74,
Professor Kamerschen further explains the evolution of the credit system: “Later the
goldsmiths learned a more efficient way to put their credit money into circulation. They
lent by issuing additional notes, rather than by paying out in gold. In exchange for the
interest-bearing note received from their customer (in effect, the loan contract), they gave
their own non-interest bearing note. Each was actually borrowing from the other … The
advantage of the later procedure of’ lending notes rather than gold was that . . . more
notes could be issued if the gold remained in the vaults … Thus, through the principle of
bank note issuance, banks learned to create money in the form of their own liability.”
[Emphasis Added]

MODERN MONEY MECHANICS

Another publication which explains modern banking as learned from the Goldsmiths is
Modern Money Mechanics (5th edition 1992), published by the Federal Reserve Bank of
Chicago which states beginning on page 3: “It started with the goldsmiths …” At one
time, bankers were merely middlemen. They made a profit by accepting gold and coins
brought to them for safekeeping and lending the gold and coins to borrowers. But the
goldsmiths soon found that the receipts they issued to depositors were being used as a
means of payment. ‘Then, bankers discovered that they could make loans merely by
giving borrowers their promises to pay, or bank notes… In this way, banks began to create
money … Demand deposits are the modern counterpart of bank notes . . . It was a small
step from printing notes to making book entries to the credit of borrowers which the
borrowers, in turn, could ‘spend’ by writing checks, thereby printing their own money.”
[Emphasis added]

HOW BANKS CREATE MONEY

In the modern sense, banks create money by creating “demand deposits.” Demand
deposits are merely “book entries” that reflect how much lawful money the bank owes its
customers. Thus, all deposits are called demand deposits and are the bank’s liabilities.
The bank’s assets are the vault cash plus all the “IOUs” or promissory notes that the
borrower signs when they borrow either money or credit. When a bank lends its cash
(legal money), it loans its assets, but when a bank lends its “credit” it lends its liabilities.
The lending of credit is, therefore, the exact opposite of the lending of cash (legal
money).

At this point, we need to define the meaning of certain words like “lawful money”, “legal

tender”, “other money” and “dollars”. The terms “Money” and “Tender” had their origins
in Article 1, Sec. 8 and Article 1, Sec. 10 of the Constitution of the United States. 12
U.S.C. §152 refers to “gold and silver coin as lawful money of the United States” and
was unconstitutionally repealed in 1994 in-that Congress can not delegate any portion of
their constitutional responsibility without Amendment. The term “legal tender” was
originally cited in 31 U.S.C.A. §392 and is now re-codified in 31 U.S.C.A. §5103 which
states: “United States coins and currency . . . are legal tender for all debts, public charges,
taxes, and dues.” The common denominator in both “lawful money” and “legal tender
money” is that the United States Government issues both.

With Bankers, however, we find that there are two forms of money – one is government-
issued, and privately owned banks such as WASHINGTON MUTUAL, and JP
MORGAN CHASE, issue the other. As we have already discussed government issued
forms of money, we must now scrutinize privately issued forms of money.

All privately issued forms of money today are based upon the liabilities of the issuer.
There are three common terms used to describe this privately created money. They are
“credit”, “demand deposits” and “checkbook money”. In the Sixth edition of Blacks Law
Dictionary, p.367 under the term “Credit” the term “Bank credit” is described as: “Money
bank owes or will lend a individual or person”. It is clear from this definition that “Bank
credit” which is the “money bank owes” is the bank’s liability. The term “checkbook
money” is described in the book “I Bet You Thought”, published by the privately owned
Federal Reserve Bank of New York, as follows: “Commercial banks create checkbook
money whenever they grant a loan, simply by adding deposit dollars to accounts on their
books to exchange for the borrowers IOU . . . .” The word “deposit” and “demand
deposit” both mean the same thing in bank terminology and refer to the bank’s liabilities.

For example, the Chicago Federal Reserves publication, “Modern Money Mechanics”
states: “Deposits are merely book entries … Banks can build up deposits by increasing
loans … Demand deposits are the modern counterpart of bank notes. It was a small step
from printing notes to making book entries to the credit of borrowers which the
borrowers, in turn, could ‘spend’ by writing checks. Thus, it is demonstrated in “Modern
Money Mechanics” how, under the practice of fractional reserve banking, a deposit of
$5,000 in cash could result in a loan of credit/checkbook money/demand deposits of.
$100,000 if reserve ratios set by the Federal Reserve are 5% (instead of 10%).

In a practical application, here is how it works. If a bank has ten people who each deposit
$5,000 (totaling $50,000) in cash (legal money) and the bank’s reserve ratio is 5%, then
the bank will lend twenty times this amount, or $1,000,000 in “credit” money. What the
bank has actually done, however, is to write a check or loan its credit with the intended
purpose of circulating credit as “money.” Banks know that if all the people who receive a
check or credit loan come to the bank and demand cash, the bank will have to close its
doors because it doesn’t have the cash to back up its check or loan. The bank’s check or
loan will, however, pass as money as long as people have confidence in the illusion and
don’t demand cash. Panics are created when people line up at the bank and demand cash
(legal money), causing banks to fold as history records in several time periods, the most
recent in this country was the panic of 1933.

THE PROCESS OF PASSING CHECKS OR CREDIT AS MONEY IS DONE
QUITE SIMPLY

A deposit of $5,000 in cash by one person results in a loan of $100,000 to another person
at 5% reserves. The person receiving the check or loan of credit for $100,000 usually
deposits it in the same bank or another bank in the Federal Reserve System. The check or
loan is sent to the bookkeeping department of the lending bank where a book entry of
$100,000 is credited to the borrower’s account. The lending bank’s check that created the
borrower’s loan is then stamped “Paid” when the account of the borrower is credited a
“dollar” amount. The borrower may then “spend” these book entries (demand deposits)
by writing checks to others, who in turn deposit their checks and have book entries
transferred to their account from the borrower’s checking account. However, two highly
questionable and unlawful acts have now occurred. The first was when the bank wrote
the check or made the loan with insufficient funds to back them up. The second is when
the bank stamps its own “Not Sufficient Funds” check “paid” or posts a loan by merely
crediting the borrower’s account with book entries the bank calls “dollars.” Ironically, the
check or loan seems good and passes as money — unless an emergency occurs via
demands for cash – or a Court challenge — and the artful, illusion bubble, bursts.

DIFFERENT KINDS OF MONEY

The book, “I Bet You Thought”, published by the Federal Reserve Bank of New York,
states: “Money is any generally accepted medium of exchange, not simply coin and
currency. Money doesn’t have to be intrinsically valuable, be issued by a government or
be in any special form.” [Emphasis added] Thus we see that privately issued forms of
money only require public confidence in order to pass as money. Counterfeit money also
passes as money as long as nobody discovers it’s counterfeit. Like wise, “bad” checks and
“credit” loans pass as money so long as no one finds out they are unlawful. Yet, once the
fraud is discovered, the values of such “bank money” like bad check’s ceases to exist.
There are, therefore, two kinds of money — government issued legal money and privately
issued unlawful money.

DIFFERENT KINDS OF DOLLARS

The dollar once represented something intrinsically valuable made from gold or silver.
For example, in 1792, Congress defined the silver dollar as a silver coin containing
371.25 grains of pure silver. The legal dollar is now known as “United States coins and
currency.” However, the Banker’s dollar has become a unit of measure of a different kind
of money. Therefore, with Bankers there is a “dollar” of coins and a dollar of cash (legal
money), a “dollar” of debt, a “dollar” of credit, a “dollar” of checkbook money or a
“dollar” of checks. When one refers to a dollar spent or a dollar loaned, he should now
indicate what kind of “dollar” he is talking about, since Bankers have created so many
different kinds.

A dollar of bank “credit money” is the exact opposite of a dollar of “legal money”. The
former is a liability while the latter is an asset. Thus, it can be seen from the earlier

statement quoted from I Bet You Thought, that money can be privately issued as: “Money
doesn’t have to … be issued by a government or be in any special form.” It should be
carefully noted that banks that issue and lend privately created money demand to be paid
with government issued money. However, payment in like kind under natural equity
would seem to indicate that a debt created by a loan of privately created money can be
paid with other privately created money, without regard for “any special form” as there
are no statutory laws to dictate how either private citizens or banks may create money.

BY WHAT AUTHORITY?

By what authority do state and national banks, as privately owned corporations, create
money by lending their credit –or more simply put – by writing and passing “bad” checks
and “credit” loans as “money”? Nowhere can a law be found that gives banks the
authority to create money by lending their liabilities.

Therefore, the next question is, if banks are creating money by passing bad checks and
lending their credit, where is their authority to do so? From their literature, banks claim
these techniques were learned from the trade secrets of the Goldsmiths. It is evident,
however, that money creation by private banks is not the result of powers conferred upon
them by government, but rather the artful use of long held “trade secrets.” Thus, unlawful
money creation is not being done by banks as corporations, but unlawfully by bankers.

Article I, Section 10, para. 1 of the Constitution of the United States of America
specifically states that no state shall “… coin money, emit bills of credit, make any
thing but gold and silver coin a Tender in Payment of Debts, pass any Bill of
Attainder, ex post facto Law, or Law impairing the Obligations of Contracts . .
“[Emphasis added]

The states, which grant the Charters of state banks also, prohibit the emitting of
Bills of credit by not granting such authority in bank charters. It is obvious that “We
the people” never delegated to Congress, state government, or agencies of the state, the
power to create and issue money in the form of checks, credit, or other “bills of credit.”
The Federal Government today does not authorize banks to emit, write, create, issue and
pass checks and credit as money. But banks do, and get away with it! Banks call their
privately created money nice sounding names, like “credit”, “demand deposits”, or
“checkbook money”. However, the true nature of “credit money” and “checks” does not
change regardless of the poetic terminology used to describe them. Such money in
common use by privately owned banks is illegal under Art. 1, Sec.10, para. 1 of the
Constitution of the United States of America, as well as unlawful under the laws of the
United States and of this State.

VOID “ULTRA VIRES” CONTRACTS

The courts have long held that when a corporation executes a contract beyond the scope
of its charter or granted corporate powers, the contract is void or “ultra vires”.

In Central Transp. Co. v. Pullman, 139 U.S. 60, 11 S. Ct. 478, 35 L. Ed. 55, the court
said: “A contract ultra vires being unlawful and void, not because it is in itself immoral,
but because the corporation, by the law of its creation, is incapable of making it, the

courts, while refusing to maintain any action upon the unlawful contract, have always
striven to do justice between the parties, so far as could be done consistently with
adherence to law, by permitting property or money, parted with on the faith of the
unlawful contract, to be recovered back, or compensation to be made for it. In such case,
however, the action is not maintained upon the unlawful contract, nor according to its
terms; but on an implied contract of the defendant to return, or, failing to do that, to make
compensation for, property or money which it has no right to retain. To maintain such an
action is not to affirm, but to disaffirm, the unlawful contract.”

“When a contract is once declared ultra vires, the fact that it is executed · does not
validate it, nor can it be ratified, so as to make it the basis of suitor action, nor does the
doctrine of estoppel apply.” F& PR v. Richmond, 133 SE 898; 151 Va 195.

The issue of whether the lender who writes and passes a “bad” check or makes a “credit”
loan has a claim for relief against the borrower is easy to answer, providing the lender
can prove that he gave a lawful consideration, based upon lawful acts. But did the lender
give a lawful consideration? To give a lawful consideration, the lender must prove
that he gave the borrower lawful money such as coins or currency. Failing that, he
can have no claim for relief in a court at law against the borrower as the lender’s
actions were ultra vires or void from the beginning of the transaction.

It can be argued that “bad” checks or “credit” loans that pass as money are valuable; but
so are counterfeit coins and currency that pass as money. It seems unconscionable that a
bank would ask homeowners to put up a homestead as collateral for a “credit loan” that
the bank created out of thin air. Would this court of law or equity allow a counterfeiter to
foreclose against a person’s home because the borrower was late in payments on an
unlawful loan of counterfeit money? Were the court to do so, it would be contrary to all
principles of law.

The question of valuable consideration in the case at bar, does not depend on any value
imparted by the lender, but the false confidence instilled in the “bad” check or “credit”
loan by the lender. In a court at law or equity, the lender has no claim for relief. The
argument that because the borrower received property for the lender’s “bad” check or
“credit” loan gives the lender a claim for relief is not valid, unless the lender can prove
that he gave lawful value. The seller in some cases who may be holding the “bad” check
or “Credit” loan has a claim for relief against the lender or the borrower or both, but the
lender has no such claim.

BORROWER RELIEF

Since we have established that the lender of unlawful or counterfeit money has no claim
for relief under a void contract, the last question should be, does the borrower have a
claim for relief against the lender? First, if it is established that the borrower has made no
payments to the lender, then the borrower has no claim for relief ‘against the lender for

money damages. But the borrower has a claim for relief to void the debt he owes the
lender for notes or obligations unlawfully created by an ultra vires contract for lending
“credit” money.

The borrower, the Courts have long held, has a claim for relief against the lender to
have the note, security agreement, or mortgage note the borrower signed declared
null and void.

The borrower may also have claims for relief for breach of contract by the lender for not
lending “lawful money” and for “usury” for charging an interest rate several times greater
than the amount agreed to in the contract for any lawful money actually risked by the
lender. For example, if on a $100,000 loan it can be established that the lender actually
risked only $5,000 (5% Federal Reserve ratio) with a contract interest rate of 10%, the
lender has then loaned $95,000 of “credit” and $5,000 of “lawful money”. However,
while charging 10% interest ($10,000) on the entire $100,000. The true interest rate on
the $5,000 of “lawful money” actually risked by the lender is 200% which violates
Usury laws of this state.

If no “lawful money” was loaned, then the interest rate is an infinite percentage.
Such techniques the bankers say were learned from the trade secrets of the
Goldsmiths. The Courts have repeatedly ruled that such contracts with borrowers
are wholly void from the beginning of the transaction, because banks are not
granted powers to enter into such contracts by either state or national charters.

ADDITIONAL BORROWER RELIEF

In Federal District Court the borrower may have additional claims for relief under “Civil
RICO” Federal Racketeering laws (18 U.S.C. § 1964). The lender may have established a
“pattern of racketeering activity” by using the U.S. Mail more than twice to collect an
unlawful debt and the lender may be in violation of 18 U.S.C. §1341, 1343, 1961 and
1962.

The borrower has other claims for relief if he can prove there was or is a conspiracy to
deprive him of property without due process of law under. (42 U.S.C. §1983
(Constitutional Injury), 1985 (Conspiracy) and 1986 (“Knowledge” and “Neglect to
Prevent” a U.S. Constitutional Wrong), Under 18 U.S.C.A.§ 241 (Conspiracy) violators,
“shall be fined not more than $10,000 or imprisoned not more than ten (10) years or
both.”

In a Debtor’s RICO action against its creditor, alleging that the creditor had collected an
unlawful debt, an interest rate (where all loan charges were added together) that
exceeded, in the language of the RICO Statute, “twice the enforceable rate”. The Court
found no reason to impose a requirement that the Plaintiff show that the Defendant had
been convicted of collecting an unlawful debt, running a “loan sharking” operation. The
debt included the fact that exaction of a usurious interest rate rendered the debt unlawful
and that is all that is necessary to support the Civil RICO action. Durante Bros. & Sons,
Inc. v. Flushing Nat ‘l Bank. 755 F2d 239, Cert. denied, 473 US 906 (1985).

The Supreme Court found that the Plaintiff in a civil RICO action, need establish only a

criminal “violation” and not a criminal conviction. Further, the Court held that the
Defendant need only have caused harm to the Plaintiff by the commission of a predicate
offense in such a way as to constitute a “pattern of Racketeering activity.” That is, the
Plaintiff need not demonstrate that the Defendant is an organized crime figure, a mobster
in the popular sense, or that the Plaintiff has suffered some type of special Racketeering
injury; all that the Plaintiff must show is what the Statute specifically requires. The RICO
Statute and the civil remedies for its violation are to be liberally construed to effect the
congressional purpose as broadly formulated in the Statute. Sedima, SPRL v. Imrex Co.,
473 US 479 (1985).

Aside from any legal obligation, there exists a societal and moral obligation enure to both
the Plaintiff and the Defendant in that if you were to defuse a Bomb, and you completed
the task 99% correct, you are still dead. Grantor believes that his position on the law is
sound, but fears grievous repercussions throughout the financial community if he should
prevail. The credit for money scheme is endemic throughout our society and could have
devastating effects on the national economy.

Grantor believes that another approach may be explored as follows:

PERFECT OBLIGATION AS TO A HUMAN BEING

That which is borrowed is wealth. Labor created that wealth, so it is money
notwithstanding its form. Consideration is promised in advance by the Promissor of the
Note, in the nature of principal and interest payments for the consideration provided by
the lender, which is his personal wealth created by his labor.

A Mortgage Note or Promissory Note secures the position of the lender and if there is
default on the promise to pay then the borrower has agreed to accept the strict foreclosure
remedy provided by state statutes.

Then the borrower obligated themselves to pay back the principal and pay for the use of
it, in the form of interest for the years over which the principal is to be paid back. When
payments stop there is a prima facie injury to the lender. When payments stop the
lender has strict foreclosure procedure in state court to remedy the pay back of the
balance of the principal.

Judgment to foreclose on the property is granted upon the mere proof that payments have
ceased as promised. The property is sold to cover the unpaid balance; deficiency
judgment may be needed. All is right with the world. Here the lender would be
prejudiced if complete and swift remedy were not available. Absent such remedy the
government would be party to placing the lender into a condition of involuntary servitude
to the borrower.

PERFECT OBLIGATION AS TO A BANK

In years past banks and savings and loans institutions enjoyed the remedy outlined above.
The reason was they were lending out money belonging to their depositors and there was
prima facie injury to the depositors upon the mere proof that payments had ceased.

Thereby the bank as well as the government would be party to creating a condition of
involuntary servitude upon the depositors if strict foreclosure remedy were not available.
Today depositors are not in jeopardy of being injured when a person borrows money
from a bank. The bank does not lend their money, only their credit in the amount of the
loan (paper accounting). Hence no prima facie injury exists to either the depositors or the
bank upon the mere proof that payments cease. Injury is based upon the payments made
as to the credit line.

PERFECT OR IMPERFECT OBLIGATION

A perfect obligation is one recognized and sanctioned by positive law; one of which the
fulfillment can be enforced by the aid of the law. But if the duty created by the obligation
operates only on the moral sense, without being enforced by any positive law, it is called
an “imperfect obligation,” and creates no right of action, nor has it any legal operation.
The duty of exercising gratitude, charity, and the other merely moral duties are examples
of this kind of obligation. Edwards v. Keaney, 96 U.S. 595, 600, 24 L.Ed. 793.

Government approved the Federal Reserve Bank, Inc., as the Central Banking system for
the United States, and it’s policy is reviewed by Congress albeit, in a haphazard manner.
The Federal Reserve authorizes its “private money” “Federal Reserve Bank Notes” to be
used by lending institutions such as member banks, to operate upon a system of
fractionalizing. The nature of which is that they do not lend either their money or the
money of the depositors, the money is created out of thin air, by the mere stroke of a pen.
When there is no consideration in jeopardy of being returned, then the obligation is to
make the bank injury proof, to the extent of the obligation, which would be to make them
whole.

The only legal obligation is based upon the moral issue, which under the law is an
Imperfect Obligation, to return to them their property, which isn’t wealth, but credit. A
Promissory Note is signed under “economic compulsion” when, the “loan” will not be
consummated unless and until the borrower signs it. Thus, performing the act of signing a
Promissory Note cannot be considered voluntary.

The discharging of the credit is based upon social, economic, and moral standards to
make the bank whole, if injury is claimed, in any court action where default on the
Promissory Note is on record and where the bank fails to verify an injury, the bank
cannot enforce a promise to pay consideration where they provided no consideration. For
the bank to be able to force upon the defendant an amount over and above the credit, is to
force upon the defendants a debt that goes to the control of their labor against their will.
This condition would be Peonage, which has been abolished in this country.

(42 U.S.C. § 1994, and 18 U.S.C. §1581.)

The question then arises as to when is the obligation discharged, to put the bank in a
position, where there is no record of injury to it?

THE CASE IS CLEAR

Conspiracy against rights: If two or more persons conspire to injure, oppress, threaten,
or intimidate any person in any State, Territory, Commonwealth, Possession, or District

in the free exercise or enjoyment of any right or privilege secured to him by the
Constitution or laws of the United States, or because of his having so exercised the same;
or If two or more persons go in disguise on the highway, or on the premises of another,
with intent to prevent or hinder his free exercise or enjoyment of any right or privilege so
secured – They shall be fined under this title or imprisoned not more than ten years, or
both; and if death results from the acts committed in violation of this section or if such
acts include kidnapping or an attempt to kidnap, aggravated sexual abuse or an attempt to
commit aggravated sexual abuse, or an attempt to kill, they shall be fined under this title
or imprisoned for any term of years or for life, or both, or may be sentenced to death. [18,
USC 241]

Deprivation of rights under color of law: Whoever, under color of any law, statute,
ordinance, regulation, or custom, willfully subjects any person in any State, Territory,
Commonwealth, Possession, or District to the deprivation of any rights, privileges, or
immunities secured or protected by the Constitution or laws of the United States, or to
different punishments, pains, or penalties, on account of such person being an alien, or by
reason of his color, or race, than are prescribed for the punishment of citizens, shall be
fined under this title or imprisoned not more than one year, or both; and if bodily injury
results from the acts committed in violation of this section or if such acts include the use,
attempted use, or threatened use of a dangerous weapon, explosives, or fire, shall be fined
under this title or imprisoned not more than ten years, or both; and if death results from
the acts committed in violation of this section or if such acts include kidnapping or an
attempt to kidnap, aggravated sexual abuse, or an attempt to commit aggravated sexual
abuse, or an attempt to kill, shall be fined under this title, or imprisoned for any term of
years or for life, or both, or may be sentenced to death. [18, USC 242]

Property rights of citizens: All citizens of the United States shall have the same right, in
every State and Territory, as is enjoyed by white citizens thereof to inherit, purchase,
lease, sell, hold, and convey real and personal property. [42 USC 1982]

Civil action for deprivation of rights: Every person who, under color of any statute,
ordinance, regulation, custom, or usage, of any State or Territory or the District of
Columbia, subjects, or causes to be subjected, any citizen of the United States or other
person within the jurisdiction thereof to the deprivation of any rights, privileges, or
immunities secured by the Constitution and laws, shall be liable to the party injured in an
action at law, suit in equity, or other proper proceeding for redress, except that in any
action brought against a judicial officer for an act or omission taken in such officer’s
judicial capacity, injunctive relief shall not be granted unless a declaratory decree was
violated or declaratory relief was unavailable. For the purposes of this section, any Act of
Congress applicable exclusively to the District of Columbia shall be considered to be a
statute of the District of Columbia. [42 USC 1983]

Conspiracy to interfere with civil rights: Depriving persons of rights or privileges: If
two or more persons in any State or Territory conspire or go in disguise on the highway
or on the premises of another, for the purpose of depriving, either directly or indirectly,
any person or class of persons of the equal protection of the laws, or of equal privileges
and immunities under the laws; or for the purpose of preventing or hindering the

constituted authorities of any State or Territory from giving or securing to all persons
within such State or Territory the equal protection of the laws; or if two or more persons
conspire to prevent by force, intimidation, or threat, any citizen who is lawfully entitled
to vote, from giving his support or advocacy in a legal manner, toward or in favor of the
election of any lawfully qualified person as an elector for President or Vice President, or
as a Member of Congress of the United States; or to injure any citizen in person or
property on account of such support or advocacy; in any case of conspiracy set forth in
this section, if one or more persons engaged therein do, or cause to be done, any act in
furtherance of the object of such conspiracy, whereby another is injured in his person or
property, or deprived of having and exercising any right or privilege of a citizen of the
United States, the party so injured or deprived may have an action for the recovery of
damages occasioned by such injury or deprivation, against any one or more of the
conspirators. [42 USC 1985(3)]

Action for neglect to prevent: Every person who, having knowledge that any of the
wrongs conspired to be done, and mentioned in section 1985 of this title, are about to be
committed, and having power to prevent or aid in preventing the commission of the same,
neglects or refuses so to do, if such wrongful act be committed, shall be liable to the party
injured, or his legal representatives, for all damages caused by such wrongful act, which
such person by reasonable diligence could have prevented; and such damages may be
recovered in an action on the case; and any number of persons guilty of such wrongful
neglect or refusal may be joined as defendants in the action; and if the death of any party
be caused by any such wrongful act and neglect, the legal representatives of the deceased
shall have such action therefore, and may recover not exceeding $5,000 damages therein,
for the benefit of the widow of the deceased, if there be one, and if there be no widow,
then for the benefit of the next of kin of the deceased. But no action under the provisions
of this section shall be sustained which is not commenced within one year after the cause
of action has accrued. [42 USC 1986]

COURT: The person and suit of the sovereign; the place where the sovereign sojourns
with his regal retinue, wherever that may be. [Black’s Law Dictionary, 5th Edition, page
318.]

COURT: An agency of the sovereign created by it directly or indirectly under its
authority, consisting of one or more officers, established and maintained for the purpose
of hearing and determining issues of law and fact regarding legal rights and alleged
violations thereof, and of applying the sanctions of the law, authorized to exercise its
powers in the course of law at times and places previously determined by lawful
authority. [Isbill v. Stovall, Tex.Civ.App., 92 S.W.2d 1067, 1070; Black’s Law
Dictionary, 4th Edition, page 425]

COURT OF RECORD: To be a court of record a court must have four characteristics,
and may have a fifth. They are:

a. A judicial tribunal having attributes and exercising functions independently
of the person of the magistrate designated generally to hold it [Jones v. Jones,

Taking into consideration all of the documentation contained herein it is
abundantly clear that no foreclosure action is warranted, justified or
lawful. There is no injury to the purported lender. A court of record
should decide what actions should and must be taken as a result of the
unlawful actions of the Plaintiff.

The banks don’t lend their credit. They sign everyone’s note “without recourse”. That endorsement eliminates any liability they have on the note i.e. they gave it no credit.

It is a sale though not a loan it is more like a foreign currency exchange done at par. Your issued notes for theirs (Federal Reserve Notes).
You spend theirs and receive value.
They spend yours and receive value.
The correct plea is setoff. However chances are the party that you originally consummated the transaction with, won’t be the party enforcing the note so that plea will fail. That new party won’t have the original anyway. (originator deposited it with the Treasurer of the US and issued FRN’s against it to pay the seller)
Public Law 106–122
106th Congress
An Act
To amend the Federal Reserve Act to broaden the range of discount window loans which may be used as collateral for Federal reserve notes.
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled, That the
third sentence of the second undesignated paragraph of section
16 of the Federal Reserve Act (12 U.S.C. 412) is amended by
striking ‘‘acceptances acquired under the provisions of section 13
of this Act’’ and inserting ‘‘acceptances acquired under section 10A,10B, 13, or 13A of this Act’’
Approved December 6, 1999.

…from 10B of the Federal Reserve Act

may make advances to any member bank on its time notes having such maturities as the Board may prescribe and which are secured by mortgage loans covering a one-to-four family residence.

AS you can see all the orginals are monetized into the system and just about every mortgage (community banks are probably and exception) is unenforcable.
Now you know why they are really toxic assets. It’s not because of 5% defaults . it’s because the split the note from the mortgage. One to the FED and mortgage to a CDO.

When the note is split from the deed of trust, “the note becomes, as a practical matter, unsecured.” RESTATEMENT (THIRD) OF
PROPERTY (MORTGAGES) § 5.4 cmt. a (1997).
A person holding only a note lacks the power to foreclose because it lacks the security, and a person holding only a deed of trust suffers no
default because only the holder of the note is entitled to payment on it. See RESTATEMENT
(THIRD) OF PROPERTY (MORTGAGES) § 5.4 cmt. e (1997).
“Where the mortgagee has ‘transferred’ only the mortgage, the transaction is a nullity and his ‘assignee,’ having received no
interest in the underlying debt or obligation, has a worthless piece of paper.” 4 RICHARD R.
POWELL, POWELL ON REAL PROPERTY, § 37.27[2] (2000).

Assignment omitting reference to debt.

An assignment of the mortgage security, apart from the debt, is a nullity. And this appears to be so without reference to whether the mortgagee has the legal title. If he has the latter, he can in some states transfer it without the debt, but the mortgage lien, that is, the right to proceed against the land as security, can exist only in favor of the holder of the debt secured.

It has been decided in a number of cases, apparently, that a transfer or assignment in terms of the “mortgage,” is insufficient to transfer the debt secured, and is therefore a nullity, in the absence of a specific transfer of the debt, or of the note or bond given for the debt. These decisions purport to be based on the principle above referred to, that a transfer of the “mortgage” without the debt is a nullity.
The law of real property and other interests in land, Volume 3

COMING TO YOU LIVE DIRECTLY FROM THE DUBIN LAW OFFICES AT HARBOR COURT, DOWNTOWN HONOLULU, HAWAII LISTEN TO KHVH-AM (830 ON THE AM RADIO DIAL) ALSO AVAILABLE ON KHVH-AM ON THE iHEART APP ON THE INTERNET . Sunday – MAY 19, 2019 Is a Homeowner’s Appeal Moot Upon the Sale of Foreclosed Property? — Another […]

WAPO- The grass got long. Jim Ficken knows it. But was it so long that he should have to pay the city of Dunedin, Fla., nearly $30,000 and lose his home to foreclosure? Ficken, for one, would rather ask a judge. The 69-year-old retiree is now at risk of losing his home because he doesn’t […]

Consumer Financial Services LAW MONITOR- On April 29, New Jersey’s governor signed into law bill A4997, known as the Mortgage Servicers Licensing Act. As the title indicates, the Act creates a licensing regime for servicers of residential mortgage loans secured by real property within New Jersey. As with many state licensing regimes, the Act exempts most ban […]

Pamela Mosley was just starting a new business when she was diagnosed with breast cancer. Unable to work for the next 13 months she fell way behind on her mortgage payments and was about to be foreclosed on. WFMYNEWS2- Pamela Mosley is the type of person who does things, anything and everything. Mosley has three […]

COMING TO YOU LIVE DIRECTLY FROM THE DUBIN LAW OFFICES AT HARBOR COURT, DOWNTOWN HONOLULU, HAWAII LISTEN TO KHVH-AM (830 ON THE AM RADIO DIAL) ALSO AVAILABLE ON KHVH-AM ON THE iHEART APP ON THE INTERNET . Sunday – MAY 12, 2019 Foreclosure Workshop #74: Validity Versus Falsity — Proven Successful Ways in Which Homeowners […]

Lexology- On April 29, the New Jersey governor approved several bills related to mortgage lending in the state. According to a press release issued by the governor, the package of nine bills addresses the state’s foreclosure crisis and includes the following: A 4997, known as the Mortgage Services Licensing Act, requires persons who act as mortgage servicers […]

COMING TO YOU LIVE DIRECTLY FROM THE DUBIN LAW OFFICES AT HARBOR COURT, DOWNTOWN HONOLULU, HAWAII LISTEN TO KHVH-AM (830 ON THE AM RADIO DIAL) ALSO AVAILABLE ON KHVH-AM ON THE iHEART APP ON THE INTERNET . Sunday – MAY 5, 2019 Foreclosure Workshop #73: Wells Fargo Bank v. Prentice – Highlighting Another Emerging Challenge […]

It seems nothing gets a judge angrier than being challenged on the court’s misconception of law. In 42 years of trial experience my conclusion is that sometimes you need to risk veins popping in the neck and even contempt citation to get your point across. Yet in the heat of the moment it is easy […]

Editors; Note: Everyone looking for an attorney should listen to this show. Every lawyer thinking about turning down or accepting a case involving foreclosure defense should listen to this show. Thursdays LIVE! Click in to the Neil Garfield Show Tonight’s Show Hosted by Charles Marshall Call in at (347) 850-1260, 6pm Eastern Thursdays Charles Marshall is on […]

Until this decision I had assumed that Qui Tam actions were essentially dead in relation to the mortgage meltdown. Now I don’t think so. The question presented is whether actions brought by a private person acting as a relator on behalf of a government entity can bring claims for damages under the False Claims Act. […]

In response to my blog post last week about whether there might be causes of action for royalty or other damages or offset arising from the fact that the loan is actually a small part of a much larger group of transactions in which the borrower is a party but not a participant in profits, […]

New York State Judge Arthur Schack passed away on May 2nd, aged 71. As phrased by “Summer Chic” “he was nothing short of a mensch which, in Yiddish, is an honorific not bestowed lightly. “His life was a testament to compassion; evidenced during his sixteen years on the bench in Brooklyn’s State Supreme Court and, […]

It’s easy to blame borrowers for loans that are in “default.” The American consensus is based upon “personal responsibility”; so when a loan fails the borrower simply failed. But this does not take into account the hundreds of millions of dollars spent every year peddling loans in the media and the billions of dollars paid […]

Listen to Show Click Here: http://www.blogtalkradio.com/neilgarfield/2019/05/16/escape-from-bankster-fraud—case-study-in-the-wamu-chase-fraudulent-scheme Hello, Neil Garfield here and this is Thursday April 25, 2019. Tonight, with the help of my guest Stephen Renfrow, we are going to take a closer look at the whole fraudulent scheme surrounding the false cla […]

Banks should be intermediaries, not the principals in a transaction. If you write a check your bank is not buying the TV. Original documentation and actual facts clears everything up. But what happens if original documentation disappears like it did in the mortgage meltdown? We are left at the mercy (nonexistent) of the banks who […]

“While overall foreclosure activity is down nationwide, there are still parts of the country where we may need to keep a close eye on,” said Todd Teta, chief product officer at ATTOM Data Solutions. “For instance, Florida is seeing a steady annual increase in total foreclosure activity for the 8th consecutive month, which is being sustained by a constant […] […]

Thursdays LIVE! Click in to the Neil Garfield Show Tonight’s Show Hosted by Neil F Garfield Call in at (347) 850-1260, 6pm Eastern Thursdays Tonight’s guest is Stephen R Renfrow, born 1957 in Louisiana. He graduated with Honors from Louisiana Business College and Bakers Professional Real Estate College. He has extensive experience in Banking and Real Estate […]

LivingLies is still LivingLies Livinglies.wordpress.com=Livinglies.me Millions of people use LivingLies as a resource for considering foreclosure defenses, new laws and even law enforcement. A few weeks ago I added PureChat for people to ask direct questions. The Chat function is located at the bottom right of your computer screen. I usually respond fairly q […]

Please address comments suggestions, case law and statutes to the following email address: NeilFGarfield@hotmail.com I am currently looking at a few new strategies. I will briefly outline them here not as recommendations but as possibilities that I think deserve exploration. As part of the collaborative effort of the LivingLies blog started in 2007 I am […] […]

References to sales of loans and servicing rights are usually merely false assertions to distract homeowners and lawyers from looking at what is really happened. By accepting the premise that the loan was sold you are accepting that the loan was (a) real and (b) owned by the party who was designated to appear as […]

NOTE: This case reads like law review article. It is well worth reading and studying, piece by piece. Judge Marx has taken a lot of time to research, analyze the documents, and write a very clear opinion on the truth about the documents that were used in this case, and by extension the documents that […]

Our 4th President, James Madison was insistent on reminding everyone that in the end it is the vote of people that ultimately makes law in our Democratic Republic. Your vote does count even though there are forces trying to prevent you from voting and PR campaigns to convince you not to vote. * In the […]

Besides strict compliance with all appellate rules, lawyers must be in strict compliance with common sense. I know of no better way to immediately eliminate your chances on appeal than to assert abuse of discretion unless you have a situation that is shocking and stupid. Everything else comes under the heading of reversible error. […]

Originally published in October, 2008 this is a revised version of an article that correctly articulated the main weak points in the cases being presented for enforcement of mortgages and deeds of trust. Back then I made a few errors as to the actual duties of the trustee. I found out later that there were […]

Originally posted in November, 2008 this illustrates what happens when you destroy notes and then “recreate” them for purposes of claiming you have the original in court. The fact remains that neither of them had the original note because, as the Florida Bankers Association told the Florida Supreme Court, it was industry practice to destroy […]

Originally posted in September 2008, here is my update of issues that lawyers, regulators, judges and even borrowers have still not quite absorbed: Some time ago we mentioned on these pages that the auditors who certified the financial statements (KPMG, here) would come under intense scrutiny simply because they MUST have known, by simple common […]

Thursdays LIVE! Click in to the Neil Garfield Show Tonight’s Show Hosted by Charles Marshall and Bill Paatalo Call in at (347) 850-1260, 6pm Eastern Thursdays It’s not so easy to ascertain the name of the Plaintiff in foreclosure cases, where the Plaintiff is named as “U.S. Bank as trustee for XYZ Trust.” But the sanctions that […]

Perjury Law Defense Penal Code 118a & 118(a) Information regarding the crime of perjury is found at California penal code section 118a and 118(a). To prove that the defendant is guilty of perjury, the prosecutor must prove: The defendant testified, under penalty of perjury, in a court of law or on legal documents, and The defendant […]

Upon doing the deposition of Joeffery Long Wells Fargo I was amazed that they could be so blatant as against the California Homeowners Bill of Rights but then again it is Wells Fargo Joffrey Long rough draft Joffrey Long exhibits

Robert Wilbert | Latest News | April 29, 2017 The Debtor testified that RCS notified him that on June 1, 2016, Ditech would begin servicing the Note. A Ditech representative contacted the Debtor in June by phone and informed him that according to Ditech’s records, the Debtor was $2,000.00 in arrears on the Note. The […]

I would only add that none of the Trusts actually come to own the debt, loan, note or mortgage anyway. The creation of “assignments” and “powers of attorney” merely create the illusion of a transaction that never occurred. Rod Ciferri is licensed in New York State. I strongly recommend that lawyers read the following excerpt […]

By Tony Sarabia Published in Los Angeles Daily Journal January 3, 2013 Litigators often reach for doctrines such as res judicata or collateral estoppel to narrow the scope of a case. Res judicata prevents re-litigation of the same claim that was litigated in a prior case. Collateral estoppel prevents re-litigation of the same issue that […]

Getting the 50,000 or three times the actual damages (b) After a trustee’s deed upon sale has been recorded, a mortgage servicer, mortgagee, trustee, beneficiary, or authorized agent shall be liable to a borrower for actual economic damages pursuant to Section 3281, resulting from a material violation of Section 2923.55, 2923.6, 2923.7, 2924.9, 2924.10, 292 […]

2920.5. For purposes of this article, the following definitions apply: (a) “Mortgage servicer” means a person or entity who directly services a loan, or who is responsible for interacting with the borrower, managing the loan account on a daily basis including collecting and crediting periodic loan payments, managing any escrow account, or enforcing the note […]

2920. (a) A mortgage is a contract by which specific property, including an estate for years in real property, is hypothecated for the performance of an act, without the necessity of a change of possession. (b) For purposes of Sections 2924 to 2924h, inclusive, “mortgage” also means any security device or instrument, other than a […]

CIVIL CODE SECTION 2920-2944.10 2920. (a) A mortgage is a contract by which specific property, including an estate for years in real property, is hypothecated for the performance of an act, without the necessity of a change of possession. (b) For purposes of Sections 2924 to 2924h, inclusive, “mortgage” also means any security device or […]

Many of my readers are probably aware that California law allows commercial landlords to accept a partial payment of rent after service of a 3 Day Notice to Pay Rent or Quit and continue with an eviction action. This right to accept a partial payment after service of the notice is unique to commercial tenancies […]

On January 10, 2014 new RESPA rules went into effect concerning loss mitigation procedures. The new rules specify procedures a servicer must follow if a mortgage loan borrower requests loss mitigation assistance, such as a loan modification. The rules were drafted by the Consumer Financial Protection Bureau (“CFPB”). In drafting the loss mitigation requireme […]

CONSTRUCTIVE FRAUD: The tort negligent misrepresentation (also known as “constructive fraud”) requires that each and all of the following elements be proved: “(1) a misrepresentation of a past or existing material fact, (2) without reasonable grounds for believing it to be true, (3) with intent to induce another’s reliance on the fact misrepresented, (4) [ […]

CONCEALMENT FRAUD: The tort of deceit or fraud by concealment requires that each and all of the following elements be proved: “(1) the defendant must have concealed or suppressed a material fact, (2) the defendant must have been under a duty to disclose the fact to the plaintiff, (3) the defendant must have intentionally […]

PROMISSORY FRAUD: The tort of deceit or fraud by a false promise requires that each and all of the following elements be proved: (1) a promise made regarding a material fact without any intention of performing it; (2) the existence of the intent at the time of making the promise; (3) the promise was made […]

PROVING FRAUD and or MISREPRESENTATION: DECEIT OR INTENTIONAL FRAUD The tort of deceit or intentional fraud requires that each and all of the following elements be proved: “(a) misrepresentation (false representation, concealment, or nondisclosure); (b) knowledge of falsity (or ‘scienter’); (c) intent to defraud, i.e., to induce reliance; (d) justifiable rel […]